Cropped Down

August, 2002

Of the hundreds of companies that have gracedHawaii Business‘ Top 250 list over the past 20 years, only Amfac has the distinction of being the first-ever No. 1 company. Debuting on the list in the top spot in 1983, Amfac was at the height of its glory: 28,000 employees strong, it earned $2.21 billion in gross annual sales from its businesses in retail, agriculture, hotels, property management and development in 1982.

As Chris Kanazawa, former president of Amfac’s Hawaii real estate division, puts it, “Those were mighty good days.” That they were. Henry A. Walker Jr., revered by many as one of Hawaii’s great business leaders, was still at the helm of the company. Amfac had successfully developed Kaanapali on Maui. And its flagship retail store, Liberty House, was turning over huge volume.

However, while the company had lots of assets, it wasn’t generating much cash flow, other than random land sales here and there. It was losing money in Mainland ventures (primarily resort operations), and sugar plantations were beginning their inevitable descent. In short, Amfac was racking up huge amounts of debt.

Meanwhile, in Chicago, executives at JMB Realty Corp. became aware of Amfac’s hand-to-mouth existence, and decided that what the company really needed, to thwart its heavy bleeding, was a dose of modest, steady development planning – and JMB would serve up the prescription. In 1988, JMB Realty Corp. purchased the Big Five company for $920 million, and it was renamed Amfac/JMB Hawaii Inc.

Several local Amfac execs – among them, then-chairman of Amfac’s Hawaii group, Robert Ozaki – countered JMB’s bid unsuccessfully, which set the stage for a sticky transition. The changeover of a 135-year-old Hawaii institution to a Mainland-controlled firm was delicate at best, and difficult for most of Amfac’s thousands of employees.

“When JMB came in, Amfac was in need of capital, and I think JMB did infuse the company with capital. But like any other takeover, they brought a whole different culture, and a whole different approach to business,” says Kanazawa. “It was hard on most people, because they didn’t know what to expect. Change is a threatening thing.”

Since the buyout, Amfac has undergone its biggest changes, with the closing of its three sugar mills and the company’s dramatic and very public bankruptcy in 2002, which concurrently knocked the company off of last year’s Top 250 list. The company divested nearly everything – including its name. What was once Amfac is now Kaanapali Land LLC. Today, the company is a fractured remnant of its former self. Its holdings include small, diversified agriculture plots on Maui, the Waikele golf course on Oahu, and 5,000 acres of land in Kaanapali. In June, the state foreclosed on two of the company’s Maui-based golf courses, which Amfac used as collateral against a $66 million loan.

“Clearly, our 5,000 acres on Maui will be the focus of the company over the next 10 to 15 years,” says Gary Nickele, president of Kaanapali Land LLC. “We’re no longer the Big Five company we once were. We’re really pretty simple.”

For former Amfac employees, though, Amfac will always be much more than a golf course and a few thousand acres on Maui. “Amfac was an exciting place to work. It was a great place to learn and grow, both personally and professionally. The company, listed on the New York, Pacific and London stock exchanges, was one of America’s largest diversified services companies,” recalls Ozaki. “But it was still a heart-and-soul company.”